To The Moon

Hi everyone. Today I’ll be sharing 2 possible scenarios for Buffett’s favourite stock:

Apple Inc. (NASDAQ: AAPL)

AAPL has been trading in a series of higher highs and higher lows. Notice how it has held the dark green support trendline since 2018.

AAPL is currently trading in what seems to be a descending broadening wedge reversal pattern, after making new ATHs at 199.62. What happens next largely depends on the reaction at the 186 level:

Under the “bullish scenario”, AAPL breaks out and heads towards 198.23 to form what could possibly be the right shoulder in a head and shoulders pattern. If this happens, we can see a longer consolidation pattern.

Under the “bearish scenario”, AAPL rejects at this 186 level and heads back down towards the 158-159 bullish gap from March last year. This should also coincide with a > 50% retracement of the move from 124.17 to 199.62, as well as a retest of the 2018 support trendline.

I deem the “bearish scenario” more likely because the market is about to enter a month-long window of weakness. SPY is also hitting resistance here, so it supports the likelihood of a drawdown.

If AAPL holds 158-159 successfully, then there is a possibility of new ATHs above 199.62. However, we have to take this one move at a time, and stay nimble in a market increasingly dominated by 0DTEs.

My last sentiment on AAPL was that of a SELL. I continue to reiterate this sentiment given the upcoming window of weakness which favours bears.

Sentiment: SELL (Unchanged)

Summary (with Price Targets - NFA):

• Trading in a descending broadening wedge pattern that is expected to reject at 186 level before forming a higher low at 158 following the 158-159 gap fill. A breakout, on the other hand, will see a retest of 198.23

• “Bearish scenario” is seen to be the more likely outcome because the broader market is entering a month-long window of weakness

• Investors can consider hedging existing long positions with protective puts, or the inverse AAPL ETF (i.e. AAPD), although these instruments have an element of time decay embedded within

Alright, that’s all for this newsletter. Till next time!

$Apple(AAPL)$ $SPDR S&P 500 ETF Trust(SPY)$ $Microsoft(MSFT)$ $Alphabet(GOOG)$ $Tesla Motors(TSLA)$

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